Bhushan Steel is currently in hot water after the Central Bureau of Investigation (CBI) arrested six people, including the chairman and managing director of Syndicate Bank S.K. Jain for allegedly receiving a bribe of ₹ 50 lakh to increase the credit limits of companies. It is one of the companies whose names has come up in this context. Prakash Industries Ltd is the other one.
The CBI special judge Swarana Kanta Sharma rejected Singhal’s bail application even though he agreed to cooperate with ongoing investigations by the agency. Singhal’s lawyer also said that the allegations against him were “patently incorrect". CBI was quick to contest the grant of anticipatory bail on grounds of documents seized from the bank and Bhushan Steel during raids conducted by it.
On 2 August, CBI arrested Jain and five others for increasing credit limits of certain companies in violation of banking rules. CBI, on 1 August, searched Singhal’s house and asked him to appear before the agency on 2 August, although it had orders to arrest him. Singhal failed to appear and has since evaded arrest by CBI subsequently. CBI chief Ranjit Sinha has instituted an internal inquiry as to why orders to arrest Singhal were not executed.
CBI’s Syndicate Bank investigation dates back six months and columinated in 20 simultaneous raids in four cities, Bangalore, Bhopal, Delhi and Mumbai, earlier this month.
CBI has charged Jain for receiving a bribe of ₹ 50 lakh and abusing his official position to enhance credit limits of certain companies in contravention of banking rules.
Ved Prakash Agarwal, chairman-cum-managing director of Prakash Industries Ltd; Pawan Bansal, chartered accountant; Vineet and Puneet Godha (relatives of Jain); Vijay Pahuja; Purushotam Totlani; and Pankaj Bansal are the others who have been arrested by CBI.
Mint couldn’t immediately ascertain the extent of Syndicate Bank’s exposure to Bhushan.
On Wednesday, shares of Bhushan Steel fell 20% to ₹ 304.60 on BSE, while the benchmark Sensex shed 0.94% to 25,665.27 points.
PTI contributed to this story.
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